Vo­da­com, the cor­po­rate bully

Var­i­ous courts have ruled in favour of the in­ven­tor of Please Call Me and Vo­da­com has been or­dered to com­pen­sate him for his idea, but Nkosana Makate has yet to see a sin­gle cent.

Finweek English Edition - - ON THE MONEY TECHNOLOGY - Ed­i­to­rial@fin­week.co.za

nearlya year af­ter the Con­sti­tu­tional Court or­dered Vo­da­com to com­pen­sate Nkosana Makate, the in­ven­tor of the Please Call Me SMS ser­vice which al­lows a user to send a free mes­sage re­quest­ing a call­back from the re­cip­i­ent, the telecom­mu­ni­ca­tions gi­ant is yet to cough up.

In­stead, the Vo­da­com Please Call Me le­gal chal­lenge was back in the Con­sti­tu­tional Court in Fe­bru­ary, af­ter ne­go­ti­a­tions around com­pen­sa­tion be­tween the parties came to a grind­ing halt in Septem­ber 2016. Fol­low­ing a costly eight-year le­gal bat­tle, the court ruled in favour of Makate in April 2016, or­der­ing the parties to ne­go­ti­ate “rea­son­able com­pen­sa­tion” in good faith.

The April judg­ment was seen as a mas­sive David vs Go­liath vic­tory for Makate, who had been locked in bat­tle with Vo­da­com over Please Call Me for 15 years. Af­ter all, both the South Gaut­eng High Court and the Con­sti­tu­tional Court found that former Vo­da­com CEO Alan Knott-Craig had cre­ated a “false nar­ra­tive” about the ori­gin of the idea. Knott-Craig claimed that he de­vel­oped the Please Call Me ser­vice af­ter ob­serv­ing two se­cu­rity guards try­ing to com­mu­ni­cate in Vo­da­com’s ex­ec­u­tive of­fice block by send­ing missed calls to each other.

“This un­true story ap­pears to have been part of a strat­a­gem to deny the ap­pli­cant com­pen­sa­tion for the idea,” reads the Con­sti­tu­tional Court judg­ment from April 2016.

In 2014, the South Gaut­eng High Court found that Knott-Craig was not “frank and hon­est” about his knowl­edge of Makate and his idea and its link to the Please Call Me ser­vice.

Makate took the Please Call Me con­cept to his em­ployer in Novem­ber 2000. At the time, Vo­da­com’s head of prod­uct de­vel­op­ment, Philip Geissler, reached an oral agree­ment with Makate that Vo­da­com would try to im­ple­ment the idea.

“If it proved com­mer­cially vi­able, Mr Makate would be paid a share of pro­ceeds from the prod­uct sub­ject to terms to be ne­go­ti­ated be­tween him and Mr Geissler,” last year’s Con­sti­tu­tional Court judg­ment reads.

Vo­da­com im­ple­mented the idea in March 2001, but Makate was never com­pen­sated. The Con­sti­tu­tional Court said that “it is com­mon cause that this prod­uct has gen­er­ated rev­enue amount­ing to bil­lions of rands”.

How­ever, Vo­da­com is still dis­put­ing the amount of rev­enue that Please Call Me gen­er­ated. Makate main­tains that he wants 15% of this rev­enue and has dis­missed Vo­da­com’s as­ser­tion that it faces dif­fi­cul­ties in de­ter­min­ing the rev­enue since its in­cep­tion.

Makate had re­quested Vo­da­com to give his own ap­pointed ex­perts ac­cess to its records but Vo­da­com main­tains that Please Call Me “was never treated in its in­come state­ment as a rev­enue­gen­er­at­ing prod­uct”.

A former Vo­da­com em­ployee who worked on the fi­nan­cial side, An­drew Hen­dricks, has dis­puted Vo­da­com’s claim that it can’t eas­ily cal­cu­late the rev­enue amount.

In an af­fi­davit sup­port­ing Makate’s re­cent court pa­pers, Hen­dricks claims that Vo­da­com does have the abil­ity to cal­cu­late the to­tal rev­enue from Please Call Me. “In ad­di­tion, they know ex­actly how much ad­ver­tis­ing rev­enue is gen­er­ated off the tagged-on ad­ver­tise­ment to the ‘Please Call Me’ mes­sages.”

Vo­da­com in­sisted that it is en­gag­ing in good faith and has made a num­ber of at­tempts to re­solve the dead­lock.

How­ever, Vo­da­com is adamant that Makate’s de­mands for a share of the Please Call Me rev­enue will not fly and it is open to other method­olo­gies to ar­rive at a rea­son­able com­pen­sa­tion. It also ar­gued that Makate’s in­ter­pre­ta­tion of the Con­sti­tu­tional Court or­der is in­cor­rect, as it doesn’t sug­gest that the com­pany is obliged to pay him a share of rev­enue.

In Fe­bru­ary, the Con­sti­tu­tional Court dis­missed Makate’s ap­pli­ca­tion in which he sought clar­i­fi­ca­tion on the court’s or­der for “rea­son­able com­pen­sa­tion”, leav­ing the parties with no choice but to get back to the ne­go­ti­at­ing table.

While Vo­da­com con­tin­ues to play hard­ball with Makate, it risks show­ing South African con­sumers ex­actly what kind of cor­po­rate bully it can be. It has shown it is pre­pared to go to ab­nor­mal lengths to re­buff what has been found to be a le­git­i­mate claim from its own former em­ployee.

Vo­da­com’s strong-arm tac­tics may re­sult in a lower set­tle­ment amount than Makate de­mands, but ev­ery month this case drags on un­re­solved, more and more rep­u­ta­tional dam­age is be­ing done to the tele­coms com­pany’s cor­po­rate im­age.

Nkosana Makate In­ven­tor of the Please Call Me ser­vice

Alan Knott-Craig Former CEO of Vo­da­com

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